Zambia emerged as the most attractive market overall, offering the best growth opportunities, and the second-least amount of risk. Ghana was the least risky of the seven nations, the survey found.

Nigeria, while offering the second biggest growth opportunities, was also seen as the riskiest market. Nigeria overtook South Africa in 2014 as the continent’s largest economy by gross domestic product, but its heavy dependence on oil exports puts it in a precarious position in the current environment of depressed prices.

“Significant population growth, rapidly rising incomes and the relatively low penetration of insurance products suggest great potential for both life and non-life products in Sub-Saharan Africa,” Steve Osei-Mensah, East and Central Africa financial services advisory leader at EY, said.

“While insurers will need to address challenges involving talent, market volatility, regulation and technological capacity, among others, there are opportunities for growth in the region.”

Region’s urbanisation, youth cited

Urbanisation is a major factor in the improving market conditions, the report found. Zambia scored particularly well in this regard, as 40% of its population lives in cities.

Under-insurance is also a major issue. In Ghana, for example, only 10% of the population owns any kind of insurance.

Africa’s youthful population was also seen as an attractive feature for insurers considering entering its markets. The report found that the number of Africans joining the working-age population (ages 15 to 64) will exceed that of the rest of the world combined by 2035.

Distribution still ‘a challenge’

Respondents to the survey said increasing use of technology such as mobile phones will make it easier to distribute insurance products. But distribution remains a challenge, with 30% of respondents saying they struggle to find qualified agents.